BP BHEAD INT H [atlas:bill]

AN ACT Relating to establishing a universal service program to be funded by explicit per line charges to provide intrastate universal service support for basic telecommunications services in rural and high-cost areas; amending RCW 80.36.610; adding new sections to chapter 80.36 RCW; adding a new section to chapter 80.66 RCW; repealing RCW 80.36.600; providing an effective date; providing expiration dates; and providing for submission of this act to a vote of the people.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Universal telephone service, which is the widespread availability of basic telecommunications services at reasonably affordable rates, has long been the policy of the state of Washington and is essential to the economic well-being of the state. By this act, the legislature intends to establish a state universal service program which replaces existing implicit intrastate universal service support with explicit intrastate support to ensure that the availability and rates for basic telecommunications services in rural and high-cost locations of the state are reasonably comparable to the availability and rates for basic telecommunications services in urban and lower-cost locations of the state and, consistent with the program established by this act, to minimize the shifting of contributions among customers, groups of customers, and classes of customers.

This section expires December 31, 2011.

NEW SECTION. Sec. 2. (1) The commission shall implement a program for the preservation and advancement of universal telecommunications services that is provided for in this act that the legislature finds is consistent with the requirements of the federal telecommunications act of 1996 (47 U.S.C. Sec. 254).

(2) The purposes of the program are to:

(a) Benefit all telecommunications ratepayers in the state by ensuring that there exists a modern telecommunications network to which all citizens and businesses have reasonable access; and

(b) Provide specific, sufficient, and competitively neutral support for all telecommunications lines used to provide basic telecommunications services for customers of telecommunications companies in high-cost locations.

(3) This section expires December 31, 2011.

NEW SECTION. Sec. 3. The definitions in this section apply throughout this section and sections 1, 2, 4 through 11, and 13 of this act unless the context clearly requires otherwise.

(1) "Administrator" means the administrator of the state universal service funds designated under sections 5 and 6 of this act.

(2) "Benchmark" means an amount per high-cost location, determined by the commission by rule or order for nonrural telephone companies, above which universal service funds will be available to support the provision of service in the high-cost location.

(3) "Cost" means the cost determined using the cost proxy model, methodology, and assumptions used by the federal communications commission in determining cost for purposes of the federal high-cost universal service program established under the federal telecommunications act of 1996 (47 U.S.C. Sec. 254). Cost also means the federal communications commission model as may be subsequently revised or replaced if the commission determines that doing so would result in more accurate determinations of cost.

(4) "Funds" means the rural state universal service fund and the nonrural state universal service fund created by section 5 of this act.

(5) "High-cost location" means an exchange or wire center service area, as determined by the commission for nonrural telephone companies, where the cost of providing basic telecommunications services is greater than the benchmark established by the commission.

(6) "Nonrural telephone company" means an incumbent local exchange carrier that does not qualify as a rural telephone company as that term is defined in 47 U.S.C. Sec. 153(37).

(7) "Radio access line" means the telephone number assigned or used by a customer for two-way local wireless voice service available to the public for hire from a radio communications service company. Radio access lines include, but are not limited to, radio-telephone communications lines used in cellular telephone service, personal communications services, and network radio access lines, or their functional and competitive equivalent. Radio access lines do not include lines that provide access to one-way signaling service, such as paging service, or to communications channels suitable only for data transmission, or to nonlocal radio access line service, such as wireless roaming service, or to a private telecommunications system.

(8) "Radio communications service company" has the same meaning as in RCW 80.04.010.

(9) "Rural telephone company" has the same meaning as that term is defined in 47 U.S.C. Sec. 153(37).

(10) "Switched access line" means the telephone service line which connects a customer's telephone or equivalent telephones to the public switched telephone network. In the case of lines which provide multichannel or the equivalent access to the public switched telephone network, each voice-grade channel or channel equivalent shall be considered a separate switched access line for purposes of this act. In the case of blocked centrex service, the number of switched access lines shall equal the number of lines capable of accessing the public switched telephone network at any one time.

(11) "Telecommunications carrier" has the same meaning as that term is defined in 47 U.S.C. Sec. 153(44).

(12) "Telecommunications services" has the same meaning as that term is defined in 47 U.S.C. Sec. 153(46).

This section expires December 31, 2011.

NEW SECTION. Sec. 4. The telecommunications services to be supported by the state universal service program shall be limited to basic telecommunications services, which are the following services:

(1) Single-party service;

(2) Voice-grade access to the public switched network;

(3) Support for local usage;

(4) Dual tone multifrequency signaling (touch-tone);

(5) Access to emergency services (911);

(6) Access to operator services;

(7) Access to interexchange services;

(8) Access to directory assistance; and

(9) Toll blocking services and toll limitation services at such time as toll limitation is technically feasible at a reasonable cost.

This section expires December 31, 2011.

NEW SECTION. Sec. 5. (1) The rural state universal service fund and the nonrural state universal service fund are created. All receipts from contributions from telecommunications carriers as provided in subsection (2) of this section and other moneys authorized to be deposited in the funds by law or by order of any court with proper jurisdiction must be deposited into the funds. Any interest earned on moneys deposited in the funds shall be used for fund purposes. The funds shall be outside the state treasury. An appropriation is not required for expenditures from the funds. Amounts collected by carriers and deposited in the funds shall not be treated as income or revenue for tax purposes.

(2) The commission shall establish by rule flat rate amounts per line to fulfill the directions set forth in this act, to be assessed per switched access line and per radio access line served by each telecommunications carrier to provide support for the funds not to exceed one dollar and seventy cents per month per residential switched access line and per radio access line and not to exceed three dollars and forty cents per month per business switched access line. The rate per business switched access line shall be two times the rate per residential switched access line and per radio access line. Beginning July 1, 2001, every telecommunications carrier providing switched access lines or radio access lines in the state shall contribute to the funds on an equitable and nondiscriminatory basis the amount per switched access line and radio access line established by the commission. Each carrier shall establish a surcharge to its customers in the amount per switched access line and per radio access line established by the commission under this subsection. The surcharge shall be shown on the customer's bill as a separate item identified as the "state universal service charge." The rural fund shall not exceed fifty-five million dollars per calendar year plus the cost of administration. The nonrural fund shall not exceed fifty-seven million dollars per calendar year plus the cost of administration.

(3) Rural and nonrural telephone companies shall use moneys received from the funds to first provide a bill credit to offset the residential per line charge established under subsection (2) of this section, second to provide a bill credit to offset the business per line charge established under subsection (2) of this section, third to offset the costs of providing basic telecommunications services to areas that are unserved as of the effective date of this act in an amount for all telephone companies in total not to exceed two million dollars in any one year, and then to reduce intrastate access charge rate elements referred to in section 7 of this act. The commission shall restructure the remaining access rates on a revenue neutral basis so that the rates for originating and terminating access shall be equal. The commission shall increase access charges or other rates to reflect reductions in universal services support used to provide basic telecommunications services to areas unserved as of the effective date of this act.

(4) The funds shall be administered by a fund administrator, acting outside of the commission, designated by the commission through a competitive bid process. The commission shall establish and approve the budget for the administrator and the administrative expenses shall be paid out of the funds. The administrator may establish an account or accounts in one or more independent financial institutions. Moneys in the state universal service funds shall be used only for universal service support determined under this section, and to pay the costs of administration of the state universal service program.

(5) Any support provided by the funds to a rural telephone company or a nonrural telephone company may be provided to another carrier designated as an eligible telecommunications carrier for an area served by the rural telephone company or nonrural telephone company if the carrier provides basic telecommunications services throughout that area.

This section expires December 31, 2011.

NEW SECTION. Sec. 6. The commission shall designate telecommunications carriers that are eligible to receive support for their provision of service in high-cost locations as eligible telecommunications carriers and establish criteria for making such designations. In making such designations, the commission shall require the carriers to serve all persons requesting service, who pay the lawful charges therefor, with the basic telecommunications services within the geographic area for which designation is made. Before granting a carrier status as an eligible telecommunications carrier, the commission shall ensure that the carrier is capable of providing basic telecommunications services to any customer that may desire such services within the area the carrier seeks to serve as an eligible telecommunications carrier. Support for service provided to any individual customer shall be available for either wireline service or nonwireline service radio access lines, but not both.

This section expires December 31, 2011.

NEW SECTION. Sec. 7. (1) Beginning July 1, 2001, the commission, consistent with the direction of section 5(3) of this act, shall require that moneys from the rural universal service fund be used to replace the rural companies' interim universal service rate element to the extent possible. The commission shall also require that moneys from the rural universal service fund also replace the universal service rate element established by the commission in its U-85-23 docket to the extent possible. The administrator shall determine each year the amount that would have been raised by these rate elements and shall provide to each rural telephone company an amount from the rural state universal service fund equivalent to the amount that would have been raised had the rate elements remained in effect.

(2) The total amount calculated by the administrator for all companies shall be used to calculate the per line amounts under section 5 of this act. The amounts shall be calculated on an annual basis, but distributed monthly. If the funds are insufficient, the administrator shall distribute moneys on a pro rata basis, and the commission shall allow the rural telephone companies to recover the difference through access or other rates as proposed by the affected telephone company on a revenue-neutral basis.

(3) Beginning January 1, 2003, the commission may, after hearing, replace the universal service mechanism for rural telephone companies set out in subsection (1) of this section with the universal service mechanism that has been adopted by the federal communications commission for rural telephone companies, or continue the mechanism set out in subsection (1) of this section. If the commission chooses to implement the federal communications commission's universal service mechanism adopted by the federal communications commission for rural telephone companies, it shall do so using company specific inputs, as appropriate for the mechanism, and shall implement the new mechanism only after any court appeals concerning the federal communications commission's universal service mechanism for rural telephone companies have become final. The first year transition to the new mechanism shall be revenue neutral to the rural telephone companies, with the rural telephone companies increasing or decreasing, as appropriate, rates as proposed by the affected rural telephone company for the first-year implementation of the new mechanism.

(4) This section expires December 31, 2011.

NEW SECTION. Sec. 8. Beginning July 1, 2001, the commission shall implement a program to provide explicit support for basic telecommunications services in high-cost locations served by nonrural telephone companies. The support shall be based on the difference between the cost of providing basic telecommunications services and a benchmark determined by the commission, less any financial support received by the eligible carrier from any federal high-cost universal service support program. A separate benchmark may be established by the commission: (1) For residence lines and radio access lines; and (2) for business lines. Support shall be available for all lines used to provide basic telecommunications services in high-cost locations. If the nonrural state universal service fund is insufficient to support the nonrural universal service program at the commission-determined level of support, the commission shall adjust the benchmark, or benchmarks, upward.

This section expires December 31, 2011.

NEW SECTION. Sec. 9. (1) The administrator of the funds may request, and each telecommunications carrier shall provide, information the commission or the administrator may reasonably require for the implementation and operation of the program.

(2) Any telecommunications carrier may submit such information, or any portion thereof, under the protection of RCW 80.04.095 and the administrator shall treat such information according to the terms of RCW 80.04.095.

This section expires December 31, 2011.

NEW SECTION. Sec. 10. (1) In addition to any other penalties prescribed by law, the commission may impose penalties for delays in making the required reports or contributions under the program. The penalties shall be calculated as a percentage of the carrier's required contribution for the previous calendar year, and may not exceed an amount equal to the amount owed by the carrier.

(2) Any penalties imposed by the commission under this section or imposed for violation of rules adopted under sections 2 through 11 and 13 of this act, and RCW 80.36.610 shall be payable to the universal service fund created by section 5 of this act.

(3) In addition to any penalties imposed under this section, the administrator may withhold payments to any eligible telecommunications carrier that fails to submit information required to be submitted under sections 2 through 11 and 13 of this act, and RCW 80.36.610.

(4) This section expires December 31, 2011.

NEW SECTION. Sec. 11. (1) The commission may delegate to the secretary of the commission the authority to resolve disputes, approve expenses of the administrator, and make other administrative decisions necessary to the administration and supervision of the program consistent with the relevant statutes and commission rules.

(2) This section expires December 31, 2011.

Sec. 12. RCW 80.36.610 and 1998 c 337 s 2 are each amended to read as follows:

((~~(1)~~)) The commission is authorized to take actions, conduct proceedings, and enter orders as permitted or contemplated for a state commission under the federal telecommunications act of 1996, P.L. 104-104 (110 Stat. 56), including requiring contribution by commercial mobile service providers to the rural state universal service fund and the nonrural state universal service fund as provided in sections 1 through 11 and 13 of this act, but the commission's authority to either establish a new state program or to adopt new rules to preserve and advance universal service under section 254(f) of the federal act is limited to the actions expressly authorized by ((~~RCW 80.36.600~~)) this act. The commission may establish by rule fees to be paid by persons seeking commission action under the federal act, and by parties to proceedings under that act, to offset in whole or part the commission's expenses that are not otherwise recovered through fees in implementing the act((, but new fees or assessments charged telecommunications carriers to either establish a state program or to adopt rules to preserve and advance universal service under section 254(f) of the federal act do not take effect until the legislature has approved a state universal service program.

~~(2) The legislature intends that under the future universal service program established in this state:~~

(a) Every telecommunications carrier that provides intrastate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the preservation and advancement of universal service in the state;

~~(b) The contributions shall be competitively and technologically neutral; and~~

~~(c) The universal service program to be established in accordance with RCW 80.36.600 shall not be inconsistent with the requirements of 47 U.S.C. Sec. 254~~)).

This section expires December 31, 2011.

NEW SECTION. Sec. 13. A new section is added to chapter 80.66 RCW to read as follows:

(1) Nothing in this chapter shall prohibit the commission from administering the universal service fund created by this act, or from conducting arbitration or other proceedings under the 1996 telecommunications act, P.L. 104-104 (110 Stat. 56).

(2) This section expires December 31, 2011.

NEW SECTION. Sec. 14. Sections 1 through 11 of this act are each added to chapter 80.36 RCW.

NEW SECTION. Sec. 15. RCW 80.36.600 (Universal service program--Planning and preparation--Commission's duties--Approval of legislature required--Definitions) and 1999 c 372 s 16 & 1998 c 337 s 1 are each repealed.

NEW SECTION. Sec. 16. This act takes effect January 1, 2001.

NEW SECTION. Sec. 17. The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with chapter 1, Laws of 2000 (Initiative Measure No. 695).